CRANSTON – One of Rhode Island’s major solar energy developers has voluntarily dropped a big no-bid contract with the city to avoid a brewing controversy over being given the deal without competition.
A net metering finance agreement between the city and Warwick-based Southern Sky Renewable Energy LLC reportedly would have been worth about $79 million.
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Cranston City Council President Michael Farina confirmed Friday that the deal has been dropped and instead the contract will be awarded through a competitive bidding process.
The company “asked [Mayor Allan W. Fung] to withdraw the contract before we could have hearings on it,” Farina said.
In a letter dated Sept. 23 from Southern Sky President Ralph A. Palumbo to Fung, Palumbo explained the company’s position.
“The discussions undertaken with your administration have been appropriate and would realize millions of dollars in taxpayer savings. While we understood the city and our legal counsel to be operating under a permissible contracting method that does not require a formal RFP [request for proposals] process, we embrace participating in a formal RFP process,” Palumbo wrote.
“As such, we hereby withdraw our request of the city to proceed with the current process and ask that the introduction of Ordinance No. 9-19-03 be withdrawn,” he added. “We very much look forward to participating in [an] RFP process that we urge the city to undertake promptly.”
Fung said the contract didn’t need to be put out for competitive bidding.
“The city did not have to do an RFP process, as this proposal did not involve the purchase of goods or services nor did it involve a sale of city property,” Fung said in an email Friday to PBN. “As part of our ongoing efforts to save taxpayer dollars and maximize the benefits of clean energy development, the city has been exploring net metering for some time now and met with various potential developers.
“The administration believed that the project offered by Southern Sky, which was at a site located within the city limit, was the best opportunity to provide resultant savings to our residents in the most expeditious manner, as well as provide a community benefit,” Fung said.
Farina said he agrees with the company’s stance that it would be more appropriate to put the contract out for competitive bids.
“It makes sense because there are more [companies] that do this other than just Southern Sky,” Farina said.
In another letter dated Sept. 23, from Robert D. Murray, a lawyer representing Southern Sky, to Farina and other city officials, Murray reiterated the company’s position.
“The likely public and political furor of RFP vs. No RFP on the net metering agreement with Southern Sky would have taken away from the serious intent to try and save Cranston taxpayers money on city [electricity] costs,” Murray wrote.
“Therefore, we asked the mayor to withdraw the ordinance and begin the RFP process as soon as possible,” he added.
Fung explained: “We as an administration have always believed in transparency and that is why we put forward the proposed net metering solar agreement to the City Council and public for their discussion and consideration.
“In light of community feedback,” the mayor added, “the developer decided to voluntarily withdraw their request for approval of the agreement and indicated a willingness to participate in an RFP process. The city is appreciative of their willingness to continue to work with our community.”
Scott Blake is a PBN staff writer. Email him at Blake@PBN.com.
